An effective technique for real-time differential orbit determination with GPS bias fixing is formulated. With this technique, only real-time GPS orbits and clocks are needed (available from the NASA Global Differential GPS System with 10-20 cm accuracy). The onboard, realtime orbital states of user satellites (few meters in accuracy) are used for orbit initialization and integration. An extended Kalman filter is constructed for the estimation of the differential orbit between the two satellites as well as a reference orbit, together with their associating dynamics parameters. Due to close proximity of the two satellites and of similar body shapes, the differential dynamics are highly common and can be tightly constrained which, in turn, strengthens the orbit estimation. Without explicit differencing of GPS data, double-differenced phase biases are formed by a transformation matrix. Integer-valued fixing of these biases are then performed which greatly strengthens the orbit estimation. A 9-day demonstration between GRACE orbits with baselines of approx.200 km indicates that approx.80% of the double-differenced phase biases can successfully be fixed and the differential orbit can be determined to approx.7 mm as compared to the results of onboard K-band ranging